April 26, 2018

FINANCE SHOCK | Debit card tax: Consumers may end up paying more on bank transactions as...

Consumers may end up paying more on bank transactions as tax department has notified all top banks such as HDFC Bank, Axis Bank, ICICI Bank, State Bank of India and Kotak Mahindra Bank to pay tax on free or bundled services provided to customers who maintain a minimum account balance, for the last five years on a retrospective basis.

The tax department is evaluating the amount of cess to be collected on the basis of account charges levied by banks from customers who did not maintain a minimum balance in their accounts.

However, banks are worried about the prospect of collecting retrospective tax from its customers if the tax department’s diktat is upheld and fear that they would have to charge the amount in taxes from existing customers.